JPY

• USD/JPY attracts sellers for the second straight day as intervention fears lift the JPY.
• The less hawkish FOMC Minutes weigh on the USD, contributing to the intraday fall.
• The wide US-Japan rate differential and Iran risks should limit losses for the major.

The USD/JPY pair meets with a heavy supply during the Asian session on Friday and weakens below the 162.00 mark as traders remain on high alert amid expectations of a potential government intervention to prop up the Japanese Yen (JPY). Furthermore, some follow-through US Dollar (USD) selling turns out to be another factor exerting downward pressure on spot prices for the second straight day.

The USD Index (DXY), which tracks the Greenback against a basket of currencies, drops to a fresh weekly low in the wake of the less-hawkish FOMC Minutes, which revealed that policymakers were divided with regard to the direction of interest rates. That said, traders are still pricing in around a 65% chance that the US Federal Reserve (Fed) will raise borrowing costs in September. This, along with persistent geopolitical uncertainties, could limit deeper losses for the safe-haven buck and offer some support to the USD/JPY pair.

In the latest developments, the US military unleashed a new wave of strikes against Iran earlier this week in retaliation for Iran’s attacks on commercial ships in the Strait of Hormuz. Iran responded by targeting American allies and bombing US military installations across Bahrain and Kuwait. Moreover, US President Donald Trump said on Wednesday that the memorandum of understanding with Iran aimed at ending the conflict in the Middle East was over. This keeps geopolitical risks in play and favors the USD bulls.

Meanwhile, investors remain worried about economic risks due to continued energy supply disruptions in the Strait of Hormuz, as Japan relies on the Middle East for over 90% of its Crude Oil imports. Furthermore, borrowing costs in Japan remain significantly lower compared to other Western economies, including the US. This might hold back traders from placing aggressive bullish bets on the JPY, warranting caution before confirming that the USD/JPY pair has topped out and positioning for further losses.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

The Japanese yen strengthened past 161.5 per dollar on Friday, erasing all of its losses from earlier in the week as traders remained alert to the possibility of official intervention after the currency weakened to fresh 40-year lows. Market participants are now awaiting intervention data due later this month to determine whether Japanese authorities were behind the sharp but short-lived rallies seen in recent weeks. Investors also assessed data showing Japan’s producer prices climbed 7.1% in June, marking the fastest annual increase since March 2023 amid persistent cost pressures linked to the Middle East conflict and the yen’s sharp depreciation. Meanwhile, oil prices retreated after reports indicated that the US and Iran will continue peace negotiations despite a recent escalation in hostilities. That weighed on the dollar and Treasury yields while easing pressure on the yen by reducing import cost concerns for Japan, which depends heavily on Middle Eastern oil.

The Japanese yen traded around 162.5 per dollar on Thursday, hovering near 40-year lows as renewed conflict between the US and Iran drove oil prices higher, adding pressure to Japan’s oil-dependent economy and weighing on the currency. The US military confirmed it had carried out strikes on Iran for a second straight day, while Tehran threatened a large-scale retaliatory operation against US military bases across the region. Meanwhile, traders continued to maintain bearish positions on the yen amid the absence of intervention from Japanese authorities despite repeated warnings from Tokyo. Investors are now awaiting official intervention data later this month to determine whether the government was behind the yen’s sharp but short-lived rally on July 2. Separately, Japan’s government revised its latest draft of the annual policy agenda, calling for appropriate monetary policy that supports stable price growth.

• USD/JPY drifts lower during the Asian session, though the downside potential seems limited.
• The wide US-Japan rate differential might continue to weigh on the JPY and support the pair.
• Economic risks due to Hormuz tensions further warrant some caution for aggressive JPY bulls.

The USD/JPY pair extends the previous day’s late pullback from the vicinity of mid-162.00s and attracts some follow-through sellers during the Asian session on Tuesday. Spot prices drop to the 161.70-161.65 region in the last hour, though the downside remains cushioned in the absence of any intervention by Japanese authorities and a supportive fundamental backdrop.

Reports last week suggested that Japanese officials are abandoning their traditional habit of telegraphing intervention risks and are starting to focus on targeting speculators. The immediate market reaction, however, seems to have faded as no action has been taken yet. Moreover, the wide gap in borrowing costs between Japan and other major economies, including the US, keeps the so-called carry trade in play and continues to undermine the Japanese Yen (JPY) amid economic risks stemming from Middle East tensions.

In fact, a maritime agency reported that an oil tanker was struck by an unidentified projectile while transiting through the critical Strait of Hormuz. This comes on top of the US-Iran standoff over the idea of Iran charging vessels for using the strait and adds to worries that Japan’s economy will remain under strain due to the continued disruption of energy supplies. Moreover, concerns about the sustainability of the fragile US-Iran peace deal benefit the US Dollar’s (USD) relative safe-haven status and support the USD/JPY pair.

On the economic data front, Japan’s nominal wages – or total cash earnings – rose 3.2% in May, slightly slower ​than a revised 3.6% gain in the previous month. Meanwhile, real wages rose 1.4% from a year earlier to mark a fifth consecutive month ​of increases, though the growth rate slowed amid ‌re-accelerating consumer inflation. Furthermore, Household Spending in Japan fell for the sixth straight month, by 0.4% YoY in May. This might complicate the BoJ’s policy tightening path and backs the case for further JPY depreciation.

Meanwhile, reduced bets for interest rate hikes by the US Federal Reserve (Fed) act as a headwind for the USD and might keep a lid on any meaningful upside for the USD/JPY pair. Nevertheless, the aforementioned fundamental backdrop suggests that any corrective pullback might still be seen as a buying opportunity and remain limited. Hence, it will be prudent to wait for strong follow-through selling before confirming that spot prices have topped out in the near-term, as traders now look to FOMC Minutes on Wednesday.

Japanese Yen Price Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Canadian Dollar.

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).